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The term ‘Blue Economy’ refers to the marine economy, or the sustainable use of ocean resources for economic growth, improved livelihoods, and the preservation of marine ecosystems. The blue economy generally includes all forms of economic activity relating to oceans, seas, and coastal areas.
Since the introduction of the Paris Agreement in 2016, the concept of the blue economy gained rapid prominence given the onslaught of natural disasters such as Hurricane Dorian or Typhoon Saola. But the blue economy can help prevent such disasters repeating, particularly with the incredible potential of ‘blue carbon credits’–more on this later.
Some of the blue economy’s sub-industries include:
The list continues. Anything that touches the water is theoretically part of the blue economy. However, these four areas serve as a great introduction to understanding the blue economy’s rapid rise today following the Paris Agreement.
The green, orange, and blue economies all value the seemingly infinite potential of that word sustainability. What is sustainable, and what makes it so…sustainable? The answer lies in our relationship with the earth and its capacity to generate energy without polluting.
There are currently three popular forms of renewable marine energy: offshore wind turbines, hydroelectric dams, and ‘wave’ energy.
Offshore wind energy refers to the installation of wind turbine farms in coastal bodies of water, typically in the ocean, and typically near major population centres, such as Amsterdam or Boston. The wind patterns over the ocean tend to be more consistent and less obtrusive, delivering more power without ruining the skyline or contributing to smog.
Europe built 2.1 gigawatts (GW) of new offshore wind in the first half of 2023 alone, with a further 5 GW now planned for the near future. These efforts bring Europe’s total capacity from wind generation to 32 GW, and soon, 37 GW. The Netherlands, the UK, Germany, and Norway led the way.
Traditional hydroelectric dams such as the Hoover Dam or China’s Three Gorges continue to pump out staggering amounts of renewable energy. However, recent investments, particularly in China, advocate for a new dual-reservoir system. When energy production exceeds supply, that excess energy pumps water to the higher reservoir, kept as a ‘battery’ for a later time, when it can be released.
Wave energy, as you might guess, generates energy from the kinetic movements of the ocean’s waves. While this sounds simple, it has the potential to generate 29,500 TWh (terawatt hours) annually across the world, or ten times Europe’s annual demand. Current technology harnesses a wave’s oscillating motions through a ‘point absorber’ or an ‘oscillating water column’.
Biotechnology and pharmaceuticals together play a vital role within the global blue economy, through the harnessing of organisms necessary for valuable compounds. This not only serves economic growth and new medical breakthroughs, but aligns with the overarching principle of sustainability.
There are three primary avenues through which the blue economy gives to the world: drug development, nutraceuticals, and skincare.
The area of drug discovery and development remains vast, with exceptional humanitarian benefits. Ziconotide is a pain-relieving drug derived from the venom of the cone snail Conus magus, designed for severe chronic pain and neuropathic pain. Trabectedin, derived from the sea squirt Ecteinascidia turbinata, treats ovarian cancer. Cytarabine, initially derived from the caribbean sea sponge Cryptotethia crypta, treats leukaemia and lymphoma.
Nutraceuticals refer to the daily vitamins and nutrients we need to live a healthy and active life, often harnessed from the ocean’s resources. These include dietary supplements, functional foods, and special beverages. For example, omega-3 fatty acids provide for cardiovascular heath (salmon, mackerel, sardines), astaxanthin for skin health (algae, microalgae), chitosan for weight management (crustacean shells), and fucoidan for immune support (brown seaweed), among many others!
Similar to nutraceuticals, the skincare industry within the blue economy looks to harvest essential ingredients from below the waters. La Mer, of Estée Lauder, holds a reputation of sustainably sourcing ingredients such as sea kelp for a premium line of products. Algenist specialises in skincare products using microalgae, with a particular focus on anti-aging. Thalgo harnesses both seaweed and algae sustainably.
Sustainable fishing remains a fundamental component of the blue economy, representing the incredible need for responsible and sustainable fishing practices designed to ensure the longevity of marine ecosystems. Policies within the blue economy primarily focus on optimising the use of marine resources while protecting non-target species such as dolphins and turtles.
Here are three foundational areas within sustainable fishing: fish stock conservation, bycatch reduction, and marine protected areas.
It begins with the identification, preservation, and adequate maintenance of fish stocks. Generally, this means utilising harvest strategies that enable fish populations to regenerate and thrive, such as quotas, size limits, and seasonal closures. For example, there is a strict ‘total allowable catch’ for cod in the North Sea.
Many efforts are made to minimise bycatch, or the unintended capture of non-target species during fishing. Common examples of protected species include turtles, dolphins, and seabirds. Shrimp trawling, as one example, often co-occurs with high levels of sea turtle bycatch–thus mandating the need of now-in-place turtle excluder devices.
Marine protected areas serve to protect important habitats and portions of marine that need protecting or restoring. They also continuously generate income through sustainable tourism. Famous marine reserves include the Galápagos archipelago (Ecuador), the Great Barrier Reef (Australia), and Cocos Island (Costa Rica).
While a relatively new concept following the Paris Agreement, blue carbon credits are a relatively new concept in the realm of carbon offsetting and climate change mitigation. Like ‘regular’ or land carbon credits, they are designed to support and finance the capture and storage of carbon dioxide or other greenhouse gases proliferating in the atmosphere, contributing to global warming.
There are four elements to understanding the potential of blue carbon credits: mangroves, seagrasses, salt marshes, and carbon sequestration.
Mangroves are common coastal ecosystems consisting of salt-tolerant trees growing alongside shorelines in tropical or subtropical regions. They are generally found in estuaries, lagoons, and intertidal zones, where they are also partly submerged in water. Over and above land forests, mangroves play an essential role in fighting climate change due to their ability to capture and store large amounts of carbon in their biomass, and in the sediment beneath them.
Seagrasses are underwater plants thriving in shallow coastal areas with clear water. They form meadows or ‘beds’ on the seabed, and thus are abundant in temperate and tropical regions such as the Caribbean or Southeast Asia. They are highly effective at sequestering carbon through the process of photosynthesis, by which they trap, store, and utilise carbon.
Salt marshes are coastal wetlands with salt-tolerant vegetations, often found in estuaries or along shorelines. They serve as transitional zones between land and sea, but also provide essential habitats for a range of marine species. Like mangroves and sea grasses, they capture and store carbon through their biomass.
Carbon sequestration refers to that both unique and natural process of capturing and storing atmospheric carbon dioxide in living biomass and in the sediments below. By biomass, we mean the ‘living’ parts of the plant, be it above or below the ground. By sediment, we mean decaying plant material that contains stored carbon. This biomass and sediment, through photosynthesis, uses the atmosphere’s carbon dioxide to create additional plant material, forming a positive cycle.
Renewable energy, marine biotechnology, sustainable fishing, and blue carbon credits, all form essential pillars of the blue economy. A common theme underpinning all of them is the capacity to benefit humanity through an abundance of resources. Put another way, 71% of the Earth is water!
This is vital to remember, as the world seems on track to break the 1.5 degrees celsius ceiling of the Paris Agreement by 2027, shattering other reports of the 2030s. It’s also vital to remember that conservation projects take time, resources, and international cooperation.
It’s up to us now to spread the word on the seemingly limitless help the Earth’s oceans are willing to give us to stop climate change, and benefit all of society. Mangroves sequester about four times more carbon than rainforests. Algae halts the skin’s ageing process. Sea sponges treat cancer. All we have to do is be sustainable about it.
Next in this series of modern economies, we’ll cover the ‘purple’ economy, also known as the care economy, that seeks to highlight why we need more women leaders in the world today.
The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltec.io.
The co-author of this text, Conor Scott, CFA, has been active in the wealth management industry since 2011. Mr. Scott is a Writer for Deltec International Group, www.deltec.io.
The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees. This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service, or offering. It is not a recommendation to trade.
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